Warren Buffett helps Burger King's Canadian play

Signs for Tim Hortons and Burger King beckon drivers in Erie, Pa. The burger chain is buying the Canadian doughnut shops.

Signs for Tim Hortons and Burger King beckon drivers in Erie, Pa. The burger chain is buying the Canadian doughnut shops.

Photo: Christopher Millette, Associated Press

Warren Buffett helps Burger King's Canadian play

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Burger King wants to become a Canadian citizen - and the Sage of Omaha has signed on to help.

Warren Buffett is backing Burger King's tax-inversion deal to buy Canadian doughnuts-and-coffee chain Tim Hortons for $11.4 billion, redomicile from Miami to Ontario, and cease paying some of those pesky U.S. corporate taxes. Buffett is kicking in one quarter ($3 billion) of the deal's financing.

Buffett's Berkshire Hathaway will have a preferred stake in the combined company - which would become the third-largest fast-food company in the world - and earn 9 percent annual interest on the investment, according to Burger King.

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Isn't this the same Warren Buffett, estimated worth $66 billion, who pointed out his tax rate is lower than his secretary's and is all for closing tax loopholes and having the rich pay more? ("I think that people at the high end - people like myself - should be paying a lot more in taxes. We have it better than we've ever had it.")

Ah, yes, but this is serious money we're talking about, and Buffett, who has partnered on other deals with Burger King's controlling shareholder 3G Capital - a Brazilian private-equity firm, incidentally - clearly likes what he sees. Among other things, a Canadian corporate tax rate for Burger King (2013 profit $233.7 million) of 15 percent instead of the standard U.S. rate of 35 percent. Plus "3G does a magnificent job of running businesses," Buffett said at Berkshire Hathaway's annual meeting in Omaha in May.

Presumably that includes 3G Capital's "parsimonious practices," according to Bloomberg Businessweek. "If its management of Burger King and H.J. Heinz (another 3G-Buffett acquisition) is a guide, Tim Hortons will see jobs cut, offices made more Spartan and posh corporate travel disappear," the publication wrote.

They say money talks. I guess we'll see how that plays out with President Obama, who has lambasted "corporate deserters," called for a "new economic patriotism" and threatened administrative action to halt tax inversions.

A White House official wouldn't comment on the deal to the Wall Street Journal, but Rep. Chris Van Hollen, D-Md., co-sponsor of a best-of-luck House measure to restrict tax inversions, told the publication that Burger King becoming Canadian would spark widespread outcry. "Burger King is a household name, and this will focus the public's attention on this issue in a way that earlier inversions did not," said Van Hollen.

That worked with Walgreens, and, who knows, could work again. Initial reactions on Burger King's Facebook page weren't exactly pro-company. "Ate my last Whopper," was the general tenor. "If you attempt to buy Tim Horton's for the purposes of evading US Taxes, I will NEVER step foot in another Burger King again" read one post, which had 1,721 Likes as of Tuesday afternoon.

And maybe there will be some support from our neighbors to the north, where Tim Hortons, with 4,546 locations, including 866 in the United States, is regarded as a national institution, just like Walgreens here. However, the enraged founder of independent website Inside Timmies told the media, "I'm not too sure if Canadians would boycott. It's just not in our blood to do it."

Burger King, unsurprisingly, insists the deal, which has to be approved by both boards, has nothing to do with taxes. "We don't expect there to be meaningful tax savings or any meaningful changes in our tax rate," said CEO Daniel Schwartz, who would head the combined company.

"We're not moving, we're just growing and finding ways to serve you better. Our headquarters will remain in Miami where we were founded more than 60 years ago," the company explained on its Facebook page.

So at this point, the Sage of Omaha appears to have little to worry about. Still, for the man who once signed a "Dear Uncle Sam" letter in the New York Times as "your grateful nephew," Buffett's patriotism seems to have undergone, well, an inversion of its own.